SHARES in fertiliser and explosives company Incitec Pivot hovered around $3.18 on Thursday after Citi downgraded its rating to "sell", pushing down its share price 1.6 per cent.

Citi said despite expectations of high grain prices and a modest recovery in US gas prices, there would be no reprieve from tough conditions facing Incitec in the past six months.

It forecasted a 10 per cent decline in the company's 2013 earnings, with lower global fertilizer prices, currency headwinds and lower US coal production offsetting the benefits of its ammonium nitrate plant project at Moranbah, Queensland.

The plant is expected to produce 250,000 tonnes of ammonium nitrate this financial year. The company's net profit after tax was $510.7 million in 2011-12. It is increasing its strategic focus on its explosives business, which now makes up 60 per cent of its earnings and grew 8 per cent in comparison to its fertiliser business, which declined 40 per cent.